The encashment of cheques despite stop payment instructions can amount to deficiency in service under the Consumer Protection Act, leading to liability for the bank.

Mr. Justice V.K. Agrawal, President—This appeal, under Section 15 of the Consumer Protection Act, 1986, is directed against the order dated 11.9.2002 in Complaint No. 167/2002 by the District Consumer Disputes Redressal Forum, Raipur (hereinafter called the ‘District Forum’ for short) directing the appellant Bank to pay to the respondent Rs. 1,00,000/- with interest @ 9% p.a.

2. Undisputably, the complainant/respondent had a Savings Bank account with the appellant Bank with cheque facility. It is also not in dispute that the complainant/respondent issued 4 cheques in favour of one Madanlal Sharma being Nos. 5283087, 5283088, 5283089 and 5283090. However, it appears that on account of some dispute having arisen between the complainant/respondent and the said Madanlal Sharma, the complainant/respondent gave the appellant Bank letter dated 16.12.2000, requesting them for stop payment of the said cheques. It is further not in dispute that 2 cheques bearing Nos. 5283089 and 5283090 for Rs. 1.00 lac out of the said 4 cheques were presented subsequently and were encashed. Thus, an amount of Rs. 1.00 lac was paid by the appellant Bank to the drawee of the cheques namely, Madanlal Sharma.

3. In the complaint, the complainant/respondent raised a grievance about the encashment of the cheques as above and prayed that the amount of Rs. 1.00 lac be directed to be refunded to him, by the appellant Bank. The complaint was resisted by the appellant Bank.

4. By the impugned order the complainant’s prayer was allowed by the District Forum and appellant Bank has been directed to refund the amount of Rs. 1.00 lac with interest @ 9% p.a. payable from 21.12.2000.

5. In this appeal, learned Counsel for appellant assailed the impugned order. It was submitted that the stop payment instructions of the complainant/respondent by its letter dated 16.12.2000 were insufficient, inasmuch as the same did not mention the amount and dates of the cheques. It was further submitted that the cheques got encashed due to incomplete computerization work, in the appellant Bank, when the cheques were presented for encashment, resulting in oversight by the officers of the appellant Bank. It was further submitted that as there were some changes in the dates of the cheques, for which they were issued, the appellant Bank cannot be held liable for their encashment.

6. Learned Counsel for complainant/respondent, however, supported the impugned order. It was submitted that the cheques were permitted to be encashed despite instructions of stop payment. It amounted to deficiency in service by the appellant Bank. It was further submitted that since the complainant was put to loss, on account of deficiency as above; the order of the District Forum directing the appellant Bank to refund the amount to the complainant, is fully justified.

7. Perusal of the record of the complainant indicates that complainant had mentioned the numbers of the cheques regarding which the stop payment instructions were issued by him. Instructions as above were given as long back as on 16.12.2000. However, the appellant Bank does not appear to have raised any objection and did not make any querry from the complainant/respondent—the account holder, to clarify as to on which dates the cheques were issued and for what amounts. Therefore, contentions of the learned Counsel for appellant bank that stop payment instructions were insufficient and, therefore, could not be acted upon, cannot be accepted.

8. It may further be noted in the above context that Manager, Tatibandh Branch of appellant Bank had written a letter dated 12.1.2002 to the Senior Manager of appellant Bank stating and admitting categorically that the amount of the said cheques were paid due to oversight. It is clear that in view of the written instructions of stop payment, the amount of cheques ought not to have been paid and appears to have been paid due to oversight which amounts to deficiency in service on the part of appellant Bank. We have no